Eight years after heading into retirement — a move that actually involved becoming a full-time chocolatier — Jill-Marie Carre stood inside the empty shell of a State Street storefront this week, beside herself with excitement.
The space at the corner of Figueroa and State streets in downtown Santa Barbara was twice as large and more accessible than the Chocolat du CaliBresson location it will replace in January.
But more importantly, 1100 State St. is still within La Arcada, an eclectic mix of retailers and shops managed by the same owners who leased Carre and her husband, Jean-Michel, their current shop at 1114 State St. #25.
The couple has called La Arcada Courtyard home the past four years, having found the perfect fit to make a foray in Santa Barbara. Their original shop is in Carpinteria, where they settled after moving from France with 30-plus years in the restaurant business.
“They really support the people,” Jill-Marie Carre said of La Arcada property owners. “A lot of landlords don’t care. We’re very excited.”
The Carres are confident in their move to State Street, which has seen a typical amount of churn this year for restaurants, retail and banks.
But those paying close attention to business trends wonder if a new shift is afoot, especially as rents on the popular thoroughfare — and across Santa Barbara in general — continue to rise.
State Street can be a tough place for small business owners, who fight to balance the desire for foot traffic with the ability to pay bills.
It’s also not so peachy for national retailers, who seem more hesitant to approach spaces available for lease, according to Brad Frohling, a principal with Radius Commercial Real Estate & Investments, during an economic forecast event last week.
Within the past few months alone, Guess, American Apparel and Panera Bread closed up on State Street, with Saks Fifth Avenue recently converting to a discounted version of its brand called Saks Off 5th.
The move away from high-end retailers is perplexing business advocates, who are considering hiring a consultant to assess the retail mix downtown and ways to influence what shops go in and out.
“The difficulty is that this isn’t like a mall, with one owner,” Santa Barbara Chamber of Commerce CEO & President Ken Oplinger said.
“The question sort of becomes is State Street the retail center for the residents of Santa Barbara or the retail center for the visitors of Santa Barbara? How do we ensure that we have the retail options?”
The Santa Barbara Downtown Organization is mulling over the assessment idea, but Executive Director Maggie Campbell said it was too early in the process.
Campbell wanted to highlight the many businesses in Santa Barbara that are doing well on or near State Street, acknowledging the downtown area is dynamic in terms of leasing and demand.
Local Laura Knight, who owns Pascucci Restaurant on State Street, just helped open a new tapas concept called The Globe on Cota Street, for example. She’s also planning to open a second Pascucci in Goleta’s Camino Real Marketplace.
Café Primmo recently opened at 516 State St. as a spin off of a Southern California concept, along with the Shade Store and Big Dogs.
Gandolfo’s Deli is planning to join the State Street crowd, and longtime retailer Samy’s Camera moved from Chapala Street to State Street earlier this year.
“With hundreds of different property owners, businesses have different experiences in different locations,” Campbell said in an email.
“There are so many variables, from whether a business has a good business plan, to whether their business model is able to adapt over time to changing consumer preferences and trends, to how motivated a given landlord is to competitively maintaining tenants in their property.”
Where some find success, others face challenges.
Owners of the Brasil Arts Café, which opened about two years ago at 1230 State St., have put out a call for locals to help them save their restaurant and martial arts studio.
Palazzio Restaurant at 1026 State St. ran into some unexpected, expensive renovations last month that forced the longtime staple to close until owner Ken Boxer, his landlord and insurance companies figure out who pays for what.
Two restaurants on the same block — Chase Bar & Grill and Aldo’s Italian Restaurant — are up for sale, according to online listings.
Brad Shermann, who five years ago took over Aldo’s from the original owners who opened in 1986, said he has at least a year left on his lease and wants to stay in the space, but his landlord is asking Shermann to take over 6,000 square feet instead of the current 2,000 square feet.
The additional space is currently rented out as offices, but the landlord wants Shermann to renovate and oversee all of it.
“Taking over 6,000 square feet on State Street is a death sentence,” said Shermann, who has been in the restaurant business 30 years, also owning Nectar Restaurant on Cota Street.
“Right now, it’s very, very sustainable the way that it is. Maybe a larger chain could take over that much space. For the small businessman, it is unsustainable.
“All of the small businessmen have been pushed to the side streets. When you’re sustainable in a space, your landlord should be working with you. It’s big money in this town, and nobody wants to ruffle feathers. Everything is up in the air.”
Different property owners have different interests, Oplinger said, but being a small business owner anywhere in Santa Barbara is hard because the seaside city is such a desirable location to live and work.
“When it comes to State Street, there are some difficulties because we know rents are going up,” the chamber president said.
“Small businesses struggle to afford the cost. But that’s also what the market is charging now. While it’s unfortunate when businesses can’t afford it … we have to look at the bigger picture.”
Business leaders are hopeful new managers at Paseo Nuevo will be able to bring fresh tenants to the outdoor downtown mall. They’re also planning some renovations to spruce up the place.
The rent might be higher for Jill-Marie Carre and her husband and chocolate-maker extraordinaire Jean-Michel, but the price of the corner location is right.
Once renovations are complete, they look forward to offering signature Chocolat du CaliBresson favorites such as the salted caramel “Buddha Beauty,” “La Arcada Turtle” and more than just chocolate.
La Arcada has always felt like home because it reminded Jill-Marie Carre of France, her husband’s native country. But she hopes a State Street storefront will be just as hospitable.
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Summary of market insights and analysis from Q2 2019 South Coast commercial sales and leasing activity: Download the complete report here …